NRZ - Merger Mania in the Mortgage Space: New Residential Buys Caliber
We have been seeing a lot of merger activity lately in the mortgage banking space. Western Alliance recently bought AmeriHome and Galton Funding, while New Residential (NYSE: NRZ) just inked a deal to buy Caliber Home Loans from Lone Star Funds. After the greatest year for mortgage banking on record, New Residential is looking to the future. What does this transaction mean for the company?
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New Residential agreed to buy Caliber for $1.675 billion in cash. It will fund the transaction with $675 million in available cash and liquidity, a capital raise, and the cash on Caliber's balance sheet. Immediately after the deal announcement, New Residential announced plans for a secondary stock offering of 45 million shares at $10.10 per share, which pretty much takes care of the capital raise.
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Merger Mania in the Mortgage Space: New Residential Buys Caliber